Report: US-China trade deal could hand major blow to Malaysia, Taiwan semiconductor sector

Nikkei Asia said a formal trade deal would lead to China sourcing more semiconductor components from the US, among others. — Reuters pic
Nikkei Asia said a formal trade deal would lead to sourcing more semiconductor components from the US, among others. — Reuters pic

, March 14 — ’s GDP may shrink by up to 0.7 per cent from lost semiconductor sales if thorny trade negotiations between US and China prove successful, Nikkei Asia reported today.

Citing a Goldman Sachs analysis of the trade agreement being negotiated between the two superpowers, it said a formal deal would lead to China sourcing more semiconductor components from the US, among others.

Taiwan would be even worse hit than Malaysia and may lose a full per cent of its total economic value as a result while South Korea and Japan both stood to lose around US$8 billion.

“Besides major chip producers, Malaysia, the Philippines and could also lose some chip business through US tech supply chains,” the report added.



Semiconductor as well as electronics and electrical (E&E) exporters contribute a significant portion to the Malaysian economy.

A decline in orders would be particularly felt in Penang where most such factories are located.

The US and China began engaging in a tariff war shortly after Donald Trump was elected as the former’s president, triggering a larger slowdown.

Both countries are currently negotiating a trade deal to reverse some effects of the previous tariff moves in an attempt for a rapprochement.

Source: The Malay Mail Online





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